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LawTalk, Attorney

Category: California Employment Law

Satisfied Customers: 28885

Experience: I have 30 years of experience in the practice of law, including employment law and discrimination law.

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I owned a company that paid their employees commissions only.

Customer Question

I owned a company that paid their employees commissions only. On ex-employee is not threatening to sue me for compensation for not making any money in the 4 months he worked. We placed nurses in jobs and if you found them a job you got paid. He never got a person a job but is now seeking compensation. Am I liable to pay him?

I'm Doug, and I'm very sorry to hear of your situation, Shane. My goal is to provide you with excellent service today.

As a business operator who paid employees based on jobs that the employee is sent to, if you are unable, or fail, to send an employee out on a job, then you are not obligated to pay them any wages.

Under the law, employees are only eligible for payment of wages for hours worked---unless there is an employment contract with the employer to the contrary. If an employee who was used to getting assignments regularly and is paid on a commission, is for some reason not assigned any jobs for a period of time that employee’s remedy is to file for unemployment benefits through the state.

In an employer-employee relationship where the employer has only agreed to pay the employee based on being sent out to a job site to work, and the employer does not send the employee out for a period of time, then no wages are owed the employee from the employer. The employee is not entitled to some sort of "stand-by" pay simply because they are among a group of employees who the employer uses when jobs are available.

Based on your statement of the facts, it would appear that the employee is simply bluffing, and that they have no legal basis to make a wage claim of any kind against you, and you are not liable to pay this employee.

You may reply back to me using the Continue the Conversation or Reply to Expert link and I will be happy to continue to assist you until I am able to address your concerns, to your satisfaction.

Please also keep in mind that, even though you have already paid your deposit money over to JustAnswer, until you rate me highly for my service, I will not be paid for having assisted you with your questions.

Since he was a 1099 employee who was compensated on commissions only I feel that I should not have to compensate him for any work he may have done. I did not make any money while he worked for me as a 1099 employee and he did not make any job placements for the company. So is it safe to assume that I am not liable for any compensation? He also stated that he spent money to job boards such as Monster.com and he feels that I should pay him for his money lost. Am I responsible for this? He said he spoke with a lawyer and that he can receive over $10k in compensation from me. I do not want to pay this and can't afford this amount. Should I call his bluff or should I press the matter? I don't want to go to court either. What should I do?

As a 1099 employee, he operated as his own company, contracting with your company for jobs, and would be paid pursuant to the contractual agreement between the two of you.

I would presume that your contract provided that he be paid ONLY for jobs actually done, and not paid a retained simply because he was available for jobs, but did not do any work for your company.

That fact that he spent money trying to drum up business for your company, who would in turn, send him out on the jobs and each of you earn income---and to the extent that he did not earn any income because he did not provide you clients/customers with jobs to send him out on---you owe him nothing under the law.

You specifically asked: So is it safe to assume that I am not liable for any compensation? Base on all the fact that you have provided me, you are correct. You would not owe this 1099 contractor anything. You are not responsible for his own, personal business expenditures. Those expenses were his choice to incur and they were incurred for HIS business, in an attempt to get employment for himself. The fact that you too would have benefited by any customers that he found does not obligate you to pay for all or part of the expenses he chose to take on.

Unless your contract with him promises wages for work not done---which I would find rather hard to believe, then if he did not work for you, he is not entitled to any wages.

Finally, had he consulted with his local attorney and been told you owed him $10,000---I would have expected that you would hear this sort of threat of suit from his attorney---not from him---and I would have expected something more than just an assertion that you owe him money. I would have expected something like a legal justification for why you owe him money, how the amount of money he claims you owe is determined, and the law supporting his claim that you owe him money.

Yes, I think that this was simply a bluff. There is nothing you can do to stop the guy from complaining. All you can do is tell him that you are sorry, the agreement was that he would be paid for jobs he went out on, and as he didn’t go out on any, he was not paid, per the agreement. It really is that straightforward.

No, I don’t see any liability for you.

If you have additional questions, you may reply back to me using the Reply to Expert link.

Please also keep in mind that, even though you have already paid your deposit money over to JustAnswer, until you rate me highly for my service, I will not be paid for having assisted you with your questions.

Should I ask for the name and number of his lawyer to speak with them if in fact he does have a lawyer? Or should I press him for the law that requires me to pay him? Or should I just send an apology email explaining to him that I am not liable for any compensation? What do you suggest? Or can you provide me with a sample of what to say to him? He also stated that he recorded all of our conversations between the two of us with out my knowledge. He lives in CO and I live in GA is that legal to record a phone conversation without consent or knowledge of being recorded?

Do not encourage him to actually go get an attorney. Don't poke the proverbial stick at him in an effort to let him know that you know he has no basis for a case against you. There is nothing to be gained by that. And don’t be overly apologetic either.

Simply state that you, like he, wish that there could have been jobs that you could have sent him out on, because that would have meant that both of you would have been paid. But that the agreement was that he would be paid based on the jobs he worked. And as there were no jobs, you cannot pay him anything. Leave it at that.

Thank you for your kind words. They are appreciated.Please keep in mind that until you rate me highly for my service, I will not be credited with helping you.

He also stated that he recorded all of our conversations between the two of us with out my knowledge. He lives in CO and I live in GA is that legal to record a phone conversation without consent or knowledge of being recorded?

Just send the letter. If the guy was bluffing, as I suspect, that will be the last you likely hear from the guy. I can’t imagine that you will hear for an attorney as there is no legal basis for a wage claim against you.

If on the off chance you hear from someone claiming to be an attorney and calling on his behalf, then post that back to me here. Even after you have rated me and I have been paid for assisting you, you can continue to ask follow up questions to this issue, right in this exact thread---even years later. This thread will always be available to you.

However, new questions not related to this guy's wage claim will need to be asked in now question threads. That is the only limitation.

I will tell you that...the things you have to go through to be an Expert are quite rigorous.

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